In the past several years, much has been written about the impending retirement of a large number of the current generation of executives and the possible leadership gap that might result as these executives leave the helm. Consultant Deborah Howard recently led a workshop for NPCC for board members and executive directors on the subject of executive transitions and spoke about why succession planning is necessary as well as the pitfalls of failing to engage in succession planning..

As baby boomers head toward retirement, there may be a void in leadership within the nonprofit field. But, those organizations that address this now can be prepared. Even those that don’t have a retirement-age executive should have a succession plan in place should something unexpected occur.

However, finding a non-threatening way to raise the issue of succession is tricky: an executive (who has no intention of leaving yet) who brings it up with her board may set off alarm bells with them; and a board that does so may cause panic in the executive. This may be smoothed over with this advice: it’s in everyone’s best interest to have such a plan in place. Be frank about the subject. It’s the board’s job to fulfill its fiduciary duties, and one of those includes that of assigning leadership. And, it’s important for executives to plan for their own transition.

Should an organization suddenly lose its executive, and no planning or thought had been given to his or her successor, it could easily find itself stalled and in a void. This could damage relationships with its funders, negatively affect public perception, and cause morale problems with volunteers, staff, and board members. It could also cause a loss of momentum of the organization and negatively affect its funding.

The issue of succession planning can be even trickier in those organizations when a founding or a long-term executive director steps out of the picture. Often, the person who created a nonprofit is a charismatic individual and the organization has been personality-driven, as opposed to mission-driven. In the case where an organization is so dependent on its founder that it can’t survive without him or her, the board may have ceded its power and authority. Founders and boards need to remember that once an organization is incorporated as a 501(c)(3), it ceases being about any one individual and the board is ultimately responsible for it (see the NYS AG’s guide, Right from the Start). The board is the legal governing body responsible for setting policies, developing strategies and goals; defining the organization’s mission and monitoring the effectiveness of the organization, the executive director and itself. A board ultimately has the power to terminate an executive director from employment.

Understandably, founders and long-term executives have strong emotional ties to their organizations. It may help to think about the following: Organizations need to be able to survive without you. Consider the legacy you want to leave behind: do you want to leave an organization that is derailed or fails, or leave behind an organization that you helped become independent? Organizations need to grow and change. You may need to let go.

Unless someone (maybe a board member, maybe a staff member) is ready, willing and able to take control of the organization at a moment’s notice, you need to engage in succession planning. What will happen if something unexpected happens to the executive? Who will step up?

Another important aspect of succession planning is determining where the organization is at in its life cycle continuum. What phase is the organization in: start-up, adolescence, expansion/maturity, or renewal/decline?

Checklist for Succession Plans

1. A strategic plan should be in place. How can you look for someone to replace the leadership if you don’t know where the organization is heading? Boards need to engage in strategic planning on a regular basis. This enables you to assess both the external and internal environments to ensure that the organization is able to effectively meet challenges and seize opportunities. This exercise also opens up the possibility of invigorating and energizing the board and the staff and may lead to the discovery of new opportunities for the organization.
2. The board annually evaluates the executive director.
3. The board engages in self-assessment on an annual basis, and based on the findings, determines whether it is performing its fiduciary duties effectively and efficiently.
4. The leadership team (senior staff) has the necessary and appropriate skills and performs well as a team.
5. The leadership team has significant input into major decisions, and can lead the organization in the absence of the executive director and has the authority to make and implement decisions in their respective areas.
6. Another staff person shares important external relationships (donors, community leaders, funders, etc.) along with the executive director.
7. The organization has three months’ worth of operating capital.
8. Financial data and records are current and sound.
9. Operational manuals exist for all key administrative systems.
10. Documentation of key activities and functions of program staff exists, and other staff members have been identified to handle their duties in an emergency.

Departure-based Successions

1. Set a departure date.
2. Create a succession planning committee. This may or may not include senior staff, depending on the circumstances and the culture of the organization. Clearly define roles and expectations to make sure that everyone is on the same page.
3. Prepare a communication plan to notify key stakeholders such as staff, funders, volunteers, friends, etc.
4. Identify any areas of vulnerability and create strategies to deal with these issues.
5. Have a clear strategic direction.
6. Solidify the leadership team.
7. Build the board’s leadership abilities.
8. Put the organization’s finances in order.
9. Develop a recruitment strategy.

For Executives: When to Leave?

Ask yourself the following questions: Based on anticipated organization and environmental changes, do I have the skills necessary to lead and manage these changes? Are there things the organization needs to do that I have no interest or energy in doing? How excited am I when I think about the work I do? Am I building the leadership skills of my direct reports?

Readings

CompassPoint and the Meyer Foundation’s new report, Daring to Lead is available for free download at http://daringtolead.org.

Right From the Start - Responsibilities of Directors of Not-for-Profit Corporations published by The New York State Office of the Attorney General’s Charities Bureau is at www.charitiesnys.com/guides_advice_new.html.

Deborah Howard specializes in leadership coaching and development, team building, conflict management, strategic planning, and overall organizational development. She also has a particular expertise in working with executive directors and boards of nonprofit organizations. She can be reached at 718-857-6830 or debhoward@guidingchange.org. Her website is at www.guidingchange.org.

This article originally appeared in the October 2011 issue of New York Nonprofits, the monthly publication of the Nonprofit Coordinating Committee of New York, Inc. www.npccny.org